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Oppressed Minority Shareholder Litigation – Choosing a Lawyer

Many times, minority shareholders pursuing their shareholder oppression rights, as well as majority shareholders being sued for minority shareholder oppression, feel the important thing to look for in an attorney is experience dealing with the particular industry that the company occupies.  For example, the President of a chemical company retained counsel to represent the company on all corporate matters due to his long history representing chemical companies, since he clearly understood issues relating to that field, particularly the environmental regulations that company routinely encountered.  When the company was sued for shareholder oppression, the company was insistent that the same firm represent them in that litigation.  However, several months into the case, the President realized that the company would be better served with counsel who understood minority oppression cases, in addition to their outside general counsel who understood environmental regulations.

Advantages of subject matter expertise when choosing a lawyer includes a familiarity with the Chancery judges who handle such cases, at least in New Jersey; knowledge of valuation experts and issues; ways to strategically handle discovery in a cost-efficient manner; knowledge of the law without having to pay someone to research it; and a familiarity with creative ways to settle cases that have actually worked in other cases handled.  When representing oppressed minority shareholders, the Plaintiff often becomes preoccupied – if not downright obsessed – with what law firm the company and majority shareholders are using to represent themselves.  “Why are they allowed to use the Company attorney?” is a question I have heard dozens of times.  My response is always, “Would you rather they use someone who handles these cases all the time?”  That usually gets the message across.

The most important reason for retaining any attorney, of course, is trust, which must come above everything else.  If you do not trust your attorney, then you have more problems than you can imagine.  Secondly, though, the subject matter expertise is what truly counts.  In the example, the specific subject knowledge of minority shareholder oppression, not whether that attorney has ever represented a chemical company in the past, proved to be more beneficial.